Iraqi troops searching suspected terrorist hideouts in Fallujah (search) discovered a laboratory with manuals on how to manufacture explosives and toxins — including anthrax (search), Iraq's national security adviser said Thursday.

Qassem Dawoud said the lab was found in the southwestern district of Fallujah, where pockets of insurgents are still holding out following the Nov. 8 assault by American and Iraqi forces.

"We also found in the laboratory manuals and instructions spelling out procedures for making explosives," he said. "They also spoke about making anthrax."

Dawoud showed pictures of a shelf containing what he said were various chemicals.